Crestwood aldermen eye participation in state’s sales-tax holiday

Economic Development Commission unanimously approves participation in 3-day tax break

By BURKE WASSON

While a number of area cities will ignore the state’s three-day sales-tax holiday in August, some Crestwood officials are leaning toward the tax break after the city’s Economic Development Commission unanimously voted June 5 to participate in it.

The Crestwood Board of Aldermen was scheduled Tuesday night — after the Call went to press — to decide whether to opt out of this year’s sales-tax holiday. The deadline to notify the state is June 20 — 45 days before the Aug. 4 to Aug. 6 tax break begins.

The state sales-tax holiday does not include all sales. Customers would be limited to not having to pay Crestwood’s 1.5-percent share of sales tax on clothing and shoes priced less than $100 per item, school supplies priced less than $50 per purchase, computer software priced less than $200 per item and computers and computer equipment priced less than $2,000 per item. The sales-tax holiday does not include restaurants.

City Administrator Frank Myers recommended to aldermen May 23 that they drop out of this year’s sales-tax holiday because this year’s sales-tax revenue in Crestwood already is below projections.

On Friday, however, Myers said that based upon a report prepared by Economic Development Specialist Ellen Dailey, he is now looking upon the tax break as more of a benefit to Crestwood businesses.

“Ellen has done some follow-up with the business community on that sales-tax holiday,” Myers said. “And basically, they’re saying this period of time they have some of their best sales. So we’re going to be probably moving in a different direction on that.”

Dailey confirmed that after talking with store managers at the Crestwood locations of Best Buy, Gordmans and Kohl’s, businesses very much look forward to the annual sales-tax holiday because of the extra revenue that they make.

“Best Buy’s manager told me that this sales-tax holiday is like another Christmas for them,” Dailey said. “And their sales increase a hundredfold.”

She also added that managers at Gordmans and Kohl’s told her that managers of other stores in Missouri cities that are not participating in this year’s sales-tax holiday are disappointed.

Cities like Webster Groves, Black Jack, Fenton, Kirkwood, Maplewood, Overland, Rock Hill and St. Ann already have passed resolutions opting out of this year’s tax holiday.

Dailey also said that Crestwood-Sunset Hills Chamber of Commerce Executive Director Mary Ann McWilliams told her that several Crestwood businesses that don’t qualify for the sales-tax break also support it because of the overall increased number of shoppers that come to the city.

“(McWilliams) heard from a lot of restaurants in our area that they like it even though it doesn’t affect them,” Dailey said. “They’re not part of the sales-tax holiday, but they benefit because it brings extra customers into the area and they find that they’re busier during the sales-tax holiday time as well.”

With the Economic Development Commission’s ap-proval laid out to aldermen for possible approval Tuesday night, every Crestwood alderman contacted last weekend by the Call said they were inclined to support the sales-tax holiday once again.

Ward 1 Alderman Richard Breeding went so far as to reiterate his previous desire to have city officials welcome customers to stores on that tax-holiday weekend.

“I think it would be great if we had people from the Economic Development Commission, aldermen and maybe some city employees welcoming people to the mall and other stores and say: ‘Thanks for shopping Crestwood,’ Breeding said. “If we had something small to give them like a comeback coupon … I’ve been thinking about this for awhile. You’re enjoying us for this little tax break. Here’s a little coupon. Check us out next weekend. Or something crazy like that. You’ve got to do something different be-cause you know the mystique out there. The stereotype is Crestwood’s falling apart and we don’t have any good stores anymore or good restaurants. But I think we have plenty of good stores and good restaurants. So invite them back.”

The question regarding the tax holiday that Ward 2 Alderman Chris Pickel asked at the board’s May 23 meeting was whether businesses had given input. He said because that has been answered with Dailey’s report, he would lean toward supporting the tax break.

Pickel said he would like to focus his energy on promoting the tax holiday so that even more customers from outside Crestwood would be willing to shop in the city.

“I think it’s incumbent now on the retailers and even the city, to the extent that we can, to promote this,” Pickel said. “Because some of our neighboring communities are not going to participate in the sales-tax holiday, it could be a benefit to us to bring people into Crestwood. The issue was raised if we do continue because some of our neighbors aren’t participating, is that a benefit to us? Can we promote that? And I think that’s the challenge now.”

Ward 3 Alderman Gregg Roby said over the weekend that while he is leaning toward voting for the sales-tax holiday, he realizes there is a small risk in the city’s participation because of no guaranteed amount of sales-tax revenue going to the city. At the same time, he said that because Crestwood businesses will benefit, it’s a risk he is willing to take.

“Quite frankly, I probably will vote yes for it,” Roby said Saturday. “And the primary reason for that is number one — I know that the businesses could use the revenue. They could use the sales. And we as a city, I know at the same time, are in need obviously of tax dollars. So from that standpoint, it is a catch 22. But I also am looking at it from the position that hopefully people coming into Crestwood to spend their dollars will spend more than what the limit is set by the tax law. And in doing so, we’ll bring revenue to the city that we may not have gotten. It may have gone to Gravois Bluffs or to Galleria or to West County Shopping Center. But because we’re participating in this, these people are going to come in and hopefully spend some of their money and more of their money here in Crestwood.”

If more cities in the St. Louis area were taking part in the tax holiday, Roby said he would probably not support the tax break because the city’s sales-tax revenue in 2006 is already 5 percent lower than projections. That being said, Roby added that because Crestwood will stick out in the St. Louis area as being for the sales-tax holiday, he likely would vote yes Tuesday night.

“I think in some respects, it might be a difficult decision,” Roby said. “If other cities around us were also participating, then I’d probably be less likely to vote to participate because then you’re just diluting whatever dollars come into this area. But because Crestwood’s the only city, I believe we have the opportunity to generate some nice tax dollars here.”

Like he has in the past, Board of Aldermen President Jerry Miguel of Ward 3 said Saturday that he probably would support the tax holiday once again.

He is also concerned about the effects of having no sales-tax revenue in certain areas coming to city funds, but added that he believes the increased shoppers in town will help offset that.

This would be accomplished through increased sales-tax revenue at restaurants and on items not covered by the tax holiday.

“People are going to come to shop, and hopefully, many of them will stay to have lunch in one of the local restaurants, and the loss of sales-tax revenue in one area will be offset by an increase in sales-tax revenue in another,” Miguel said.

“So, I think it comes down to attempting to bring customers back to Crestwood, showing businesses that we are considering that they are foremost in our minds here, that we do want to support them and that we are going to support them when we have the opportunity,” the board president added.

That business-first attitude was echoed by Dailey, who said she believes the Economic Development Commission’s unanimous recommendation to take part in the tax holiday sends a message to Crestwood businesses that the city cares — especially because the city does not collect sales-tax revenue on certain items for three days.

“It could be an opportunity to show that we’re supportive of our business community,” Dailey said. “There are lots of benefits, obviously, to our business community and kind of public relations benefits to the city. But still, I know the board is going to have to consider the cost, too, and the loss of revenue at a time when we really need it.

“But everybody liked it and wanted to keep it in. All the businesses I talked to were hoping that the city would continue to participate.”